{"id":5779,"date":"2015-05-13T00:00:00","date_gmt":"2015-05-13T05:00:00","guid":{"rendered":"https:\/\/institutionalinvestorsecuritiesblog.blawgcloud.com\/2015\/05\/goldman_sachs_must_pay_nationa_1"},"modified":"2022-03-10T16:37:26","modified_gmt":"2022-03-10T22:37:26","slug":"goldman-sachs-must-pay-nationa-1","status":"publish","type":"post","link":"https:\/\/www.investorlawyers.com\/blog\/goldman-sachs-must-pay-nationa-1\/","title":{"rendered":"Goldman Sachs Must Pay National Australia Bank $100M in Mortgage Fraud Case"},"content":{"rendered":"\n

A Financial Industry Regulatory Authority (\u201cFINRA\u201d) arbitration panel recently ordered Goldman Sachs Inc. (\u201cGoldman\u201d) to pay $80 million in compensatory damages plus millions more in interest to National Australia Bank Ltd. (\u201cNAB\u201d), resulting in an award likely to cost Goldman (GS) more than $100 million. According to the award and NAB\u2019s complaint, Goldman sold NAB several collateralized debt obligations (\u201cCDOs\u201d), including the Hudson Mezzanine Funding 2006-1 Ltd. <\/p>\n

In particular, NAB paid $80 million for its stake in Hudson Mezzanine Funding, a Goldman-backed product, shortly before the financial crisis began. The investments failed when the market for CDOs and other asset backed securities fell apart in 2007 and 2008. In 2011, a U.S. senate report disclosed that while pitching Hudson Mezzanine Funding, Goldman did not tell investors such as NAB that it was betting against the assets supporting Hudson and other CDOs. As a result, according to NAB\u2019s attorneys, when the economic crisis ensued, Goldman profited from the Hudson CDO while NAB and other investors lost all of their investment.<\/p>\n

In its complaint, NAB contended that the mortgage-related deal posed a substantial conflict of interest between Goldman and its clients, and, therefore, Goldman was required under FINRA rules to disclose the conflict. Goldman argued it had no such disclosure obligation and, in fact, filed a counterclaim against NAB. <\/p>\n

Continue Reading \u203a<\/a><\/div>\n","protected":false},"excerpt":{"rendered":"

A Financial Industry Regulatory Authority (\u201cFINRA\u201d) arbitration panel recently ordered Goldman Sachs Inc. (\u201cGoldman\u201d) to pay $80 million in compensatory damages plus millions more in interest to National Australia Bank Ltd. (\u201cNAB\u201d), resulting in an award likely to cost Goldman (GS) more than $100 million. According to the award and NAB\u2019s complaint, Goldman sold NAB […]<\/p>\n","protected":false},"author":2,"featured_media":0,"comment_status":"closed","ping_status":"closed","sticky":false,"template":"","format":"standard","meta":{"jetpack_post_was_ever_published":false,"footnotes":""},"categories":[3752,3947],"tags":[],"class_list":["post-5779","post","type-post","status-publish","format-standard","hentry","category-financial-firms","category-goldman-sachs"],"yoast_head":"\nGoldman Sachs Must Pay National Australia Bank $100M in Mortgage Fraud Case — Investor Lawyers Blog — May 13, 2015<\/title>\n<meta name=\"description\" content=\"A Financial Industry Regulatory Authority (\u201cFINRA\u201d) arbitration panel recently ordered Goldman Sachs Inc. 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